Embattled OC treasurer will not seek re-election

SANTA ANA — Orange County Treasurer Chriss Street, who lost a federal bankruptcy court lawsuit against him last week, has decided not to run for re-election.

Street also recommended today he have his investment authority suspended. The Orange County Board of Supervisors will consider that request Tuesday.

U.S. Bankruptcy Judge Richard M. Neiter ruled last week that Street breached his fiduciary duty when he had control of a trust for seven years.

Street was supposed to liquidate the trust's assets, but instead acquired assets in an attempt to build a trucking empire he would lead, the judge ruled. Neiter ordered him to pay more than $7 million in damages to the End of the Road Trust.

Messages left with Street's office and his spokesman since last week have not been returned. Efforts to reach Street were also unsuccessful.

Street recommended the county's auditor-controller, David Sundstrom, take over the treasurer's investment authority. However, it's more likely the supervisors will pick the Chief Financial Officer Robert Franz, Supervisor John Moorlach said.

"That's what I recommended two and a half years ago,'' Moorlach said. "And I was shot down. I have a tendency to be a little early sometimes.''

Moorlach was referring to the 1990s when he warned county officials of problems with the county's investments as he ran against then-Treasurer Robert Citron. Moorlach lost, but Orange County declared bankruptcy in 1994 and Citron resigned. Moorlach was appointed treasurer and then won election before running for supervisor.

Moorlach brought Street aboard as the county's assistant treasurer in January 2006 before Moorlach was elected supervisor that year.

"He has a habit of not telling you the whole story,'' Moorlach said, adding he asked Street if he had any "skeletons in the closet'' before Moorlach hired him.

"When you withhold information, I equate that with lying,'' Moorlach said.

Street was forced out as the court-appointed trustee for the End of the Road Trust, which came out of the Fruehauf Trailer Corp. bankruptcy, in 2005. He was in charge of the trust since 1998.

Street tried to build a truck-trailer manufacturing empire out of the trust's assets, but ended up wasting millions of dollars, Neiter ruled. Street used some of the trust money to pay for personal expenses and did not liquidate the assets as he was supposed to do, the judge ruled.

"All he had to do was read the agreement he signed as trustee -- you liquidate assets you don't acquire them,'' Moorlach said.

"It's a real heart breaker,'' Moorlach said. "You expect someone to be a partner and they get a lot of things done and improve government in Orange County but then he just became a boat anchor always trying to explain the silly decisions he's made. It's just sad.''

The vote on the county board to strip Street of his investment authority will have to be unanimous. Street's term of office ends Jan. 3, 2011, and it's unclear whether he will resign. Moorlach has repeatedly asked him to resign.

Other candidates who have been issued forms to run for treasurer will now have until Wednesday to decide if they want to run.

Gary Capata, Patrick Desmond and Shari L. Freidenrich are the potential candidates who have been issued the documents to run. Street was also issued documents, but did not file by the 5 p.m. deadline.

Moorlach is backing Freidenrich, the Huntington Beach city treasurer. Freidenrich said she will wait until Wednesday to decide if she will run. She said she sought the documents to run because she felt someone needed to knock Street out of office.